Refer to the information provided in Table 25.3 below to answer the question(s) that follow.
Table 25.3
-Refer to Table 25.3. People's Bank excess reserves are $________.

Question

Refer to the information provided in Table 25.3 below to answer the question(s) that follow.
Table 25.3 
-Refer to Table 25.3. People's Bank excess reserves are $________.

Quizplus · Accepted Answer

Excess reserves are the amount of reserves above the required reserve ratio. In this case, the required reserve ratio is 15% of total deposits, which is $2,000,000. Therefore, required reserves are 0.15 x $2,000,000 = $300,000. Since People's Bank has $500,000 in reserves, their excess reserves are $500,000 - $300,000 = $200,000.

Refer to the Information Provided in Table 25